With thousands of tonnes of rice hanging in the balance, Minister of Foreign Trade, Henry Jeffrey yesterday said he was assured by Jamaica’s Commerce Minister Karl Samuda that the island would meet its commitment to buy all its rice needs from Guyana – 60,000 metric tonnes (MT).
Jeffrey sought to assuage jitters in the rice industry created by recent reports that Jamaica would cut its supply by half. “They have 25,000 tonnes of rice to send to Jamaica,” he said, “news like this is disheartening and it is necessary to calm nerves”, Jeffrey said,
Jamaica has already imported shipments amounting to 24,000 MT for the year, but no guaranteed buyers for thousands of tonnes of rice ready for export have fuelled concern in the industry over the security of the Jamaican market.
Samuda was widely quoted in the Jamaican press as saying that because of diminishing demand Jamaica would not purchase an additional 30,000 MT that Guyana has set aside for it.
Jeffrey said he spoke with Samuda, who said he was “misinterpreted” by the island’s press.
Samuda, he said, gave Jamaica’s commitment to buying its requirements from Guyana, minus emergency purchases sourced from the US made with waivers on the Common External Tariff (CET). He said Samuda also reiterated his commitment to sign a draft agreement on a “best endeavour” basis covering purchases and to enter into a more definitive arrangement once the Jamaica Commodity Trading Corporation is fully operational.
No clarification was issued by Samuda to the Jamaican press up to yesterday afternoon.
Although Jamaica has agreed in principle to source its rice purchases from Guyana, Samuda has told Jeffrey recently that he cannot legally give a guarantee of purchase since importation of rice is done by the private sector on behalf of the Jamaican government. The Jamaica Commodity Trading Corporation is expected to remedy this problem although it is uncertain when it will become operational. Jamaica has indicated that even with the application of the full CET, subsidised US rice imports are cheaper than rice sourced in Guyana.
Jeffrey said an analysis has to be done on market prices, citing reports that put US exports at US$750 per tonne, compared with Guyana’s exports at US$750 per tonne. He added that Guyana is still considering the merits of signing a best endeavour agreement, but he emphasised the need for a guarantee.
Meanwhile, the Guyana Rice Development Board (GRDB) is refuting claims by Jamaica that rescheduled shipments from Guyana have been responsible for shortages on its domestic market.
The GRDB has said Jamaican buyers are solely responsible for the delays in the shipment of exports to the island. Rice shipments bound for Jamaica have been left on the Georgetown wharf, pending arrangements for shipment. The Jamaica Rice Mills signed contracts for an additional shipment of 3,500 MT, which were scheduled for the second week in September.
According to a GRDB situation report, last year Guyana shipped 51, 565 MT of rice to Jamaica. This year, 23, 506 MT was shipped in the period from January to August. Contracts have been signed for the supply of nearly 5,000 MT for this month.
Earlier this year, regional suppliers Suriname and later Guyana agreed to grant Jamaica a suspension of the CET on 9,000 MT purchased extra-regionally. Both countries maintained that they were in a position to supply the rice, but agreed to allow the waiver on the CET because of the emergency situation in Jamaica and the fact that the order for 9,000 tonnes from the US had already been shipped.
Jeffrey added that Guyana also agreed to allow the CET waiver out of a spirit of cooperation. He said on July 15, 2008, the GRDB received information that Jamaica was importing rice from the US in excess of the amount catered for under the CET suspension.